The industrial power contained in section 51(xxxv) of the Australian Constitution gives the Federal Parliament power to make laws with respect to ‘conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State.’ Throughout the history of the Commonwealth, this power has remained one of the most contentious and litigated clauses in the Constitution. Because of the constitutional limits on the manner in which national legislative power can be exercised in this area, the institutions and processes of the Federal system of conciliation and arbitration have remained a consistent focus of public debate. The industrial power is unusual in not giving Parliament direct power to legislate outcomes; rather it requires use of a particular method (conciliation and arbitration) and then only in certain circumstances (interstate industrial disputes). Since 1904 national industrial relations policy has relied on implementation of the industrial power through a permanent and independent arbitration tribunal (from 1904 to 1956 the Commonwealth Court of Conciliation and Arbitration; between 1956 and 1988 the Commonwealth Conciliation and Arbitration Commission; and since 1988 the Australian Industrial Relations Commission). Yet over the last decade an institution considered one of the more enduring features of Australia’s federated history has been challenged by demands for reduction of industrial regulation in the interest of efficiency and competitiveness.
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